DNV GL © 2013 SAFER, SMARTER, GREENERDNV GL © 2013

IEEE Power & Energy Society Technical Meeting

1

Energy Storage Policy

Boston, MAJanuary 21, 2014

DNV GL © 2013

DNV Merged with GL in September 2013 to Form DNV GL

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� Headquartered in Germany

� 6,000 employees

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� Classification

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DNV GL Group

� Founded 1864

� Headquartered in Norway

� 10,000 employees

Strong position within

� Tankers

� Offshore Classification

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� System certification

Det Norske Veritas Germanischer Lloyd

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DNV GL © 2013

DNV GL Group – A Global Presence

DNV GL Group

Energy Maritime Oil & Gas SoftwareBusiness

Assurance

16,000EMPLOYEES

400OFFICES

100COUNTRIES

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$3.38BREVENUE

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DNV GL Energy is a Global Powerhouse Serving the Needs of the Energy Market

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� Having more than 3000 energy experts

across the globe enables DNV GL Energy to

deliver unparalleled value to our clients

� Our expertise spans renewable and

conventional power generation, onshore

and offshore, transmission and distribution,

and sustainable energy use

� DNV GL invests approximately 5% of annual

revenue on research and innovation and

recently opened a Research & Innovation

Hub, with smart grids and super grids as

main focus areas

� We are a world leader in renewable energy

offering advisory services across the project

lifecycle for offshore and onshore wind, solar

and marine renewables

� 80 years of accredited testing and certification

of equipment for transmission and distribution

of electricity

� With 10 energy-related labs, we have the

most extensive suite, including the most

powerful, independent High Power lab and the

largest High Voltage Lab in the world

We Understand the Business Consequences of Technical Decisions and the Technical Consequences of Business Decisions

DNV GL © 2013

Topics for Today’s Discussion

� California Efforts in Energy Storage

– Ruling that was implemented

– Cost Effectiveness Process to support ruling

– Potential Implications of the ruling

� New York Best Battery & Energy Storage Lab

– Roles of Public Private Partnerships

– NY-BEST Commercialization & Test Center for Storage

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DNV GL © 2013

California Storage Procurement Targets Ruling

� On October 17th, 2013, the California CPUC voted 5-0 to implement the targets shown in the chart

� Ruling also included an additional 1% of Peak Load by Energy Service Providers

� Excluded large pumped hydro and CAES Systems

� Included Customer sided storage – up to 50%

� Allowed the 3 IOU utilities to rate-base storage

� Utility perception?

DNV GL © 2013

Process that Led to Procurement Targets

“The California Public Utilities Commission initiated the Energy Storage Order Initiating Rulemaking (ES OIR) proceeding R.10-12-007 to satisfy the terms of AB 2514. In general, the goal of the ES OIR is to,”… establish a record for decision making in R.10-12-007 to satisfy the terms of AB 2514 (PUC Section 2836) with regard to establishing potential energy storage procurement targets for load-serving entities (LSEs).”

Requirements that needed to be met by the CPUC as specified in AB 2514, included:

� Open a proceeding to determine appropriate targets, if any, for each load-serving entity to procure viable and cost-effective energy storage systems.

� By October 1, 2013, adopt energy storage procurement targets, if determined to be appropriate, to be achieved by each LSE by December 31, 2015, and a 2nd target to be achieved by December 31, 2020.

� Ensure that the energy storage system procurement targets and policies that are established are technologically viable and cost effective”.

The final bullet is where the CPUC sought assistance from the CEC to help in the modeling to determine the cost effectiveness and viability

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DNV GL © 2013

Cost Effectiveness Effort

� Stakeholder process was held in order to evaluate Use Cases to determine whether to encourage the adoption of storage by utilities

� Use Cases were set up to evaluate the following areas – volunteers led evaluation of Use Cases

(1) Distributed Storage, (2) Community Energy Storage, (3) Distributed Peaker Model,

(4) VER-Sited Renewables, (5) Bulk Generation Storage, (6) Demand Side Management

� Example of Use Case set up shown below:

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Application

(use case)

Description/

Problem

Solving

Potential

Compensation or

Ownership

Likely Siting

Primary End Uses

Conventional

Solutions or

Alternatives

Energy Storage

Case Study

Example

Community

Energy Storage@

Improve local

service

reliability. (����)

Integration of distributed

VREs (����)

Voltage control

(����)

• Utility Rate-

based

• Third Party under contract

• Adjacent to

loads, on

utility ‘easement’

>25 kW x 2 hr

• Service

Reliability*

• D Deferral*

• T Congestion*

• Electric Supply*

• Ancillary

Services*

• Transportability

• Capacitor

• Transformer

• Controls

• AEP CES

• Detroit Edison

CES

• SMUD Solar

Smart RES/CES Project

• SDG&E

secondary storage projects

� Understanding that the modeling needs would be significant, CPUC reached out to the CEC and DNV GL to conduct the modeling for the Use Cases

DNV GL © 2013

Work Scope for DNV KEMA Evaluation

� Study Scope

– Develop methodologies to evaluate storage’s cost-effectiveness

– Goal is to reach consensus on tools used to evaluate storage

– Perform example cost-effectiveness evaluations on a subset of the priority Use Cases

identified in Phase 1 of the ES OIR

� Selected Use Cases Examined

– Transmission Connected Energy Storage

– Ancillary Services Storage, Frequency Regulation Only

– Comparative Portfolio of Storage Resource Additions (for evaluating system level

impacts)

– Distribution Level Energy Storage

– Substation sited storage, for substation capacity upgrade deferral

– Distribution circuit sited storage, for photovoltaic (PV) related circuit upgrade avoidance

and load growth related substation capacity deferral

– Demand Side (Customer Side) Energy Storage

– Customer Bill Reduction

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DNV GL © 2013

Work Scope for DNV KEMA Evaluation

� Study Scope

– Develop methodologies to evaluate storage’s cost-effectiveness

– Goal is to reach consensus on tools used to evaluate storage

– Perform example cost-effectiveness evaluations on a subset of the priority Use Cases

identified in Phase 1 of the ES OIR

� Selected Use Cases Examined

– Transmission Connected Energy Storage

– Ancillary Services Storage, Frequency Regulation Only

– Comparative Portfolio of Storage Resource Additions (for evaluating system level

impacts)

– Distribution Level Energy Storage

– Substation sited storage, for substation capacity upgrade deferral

– Distribution circuit sited storage, for photovoltaic (PV) related circuit upgrade avoidance

and load growth related substation capacity deferral

– Demand Side (Customer Side) Energy Storage

– Customer Bill Reduction

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DNV GL © 2013

DNV GL Energy Approach to Assessing StorageEnergy Storage Valuation, Applying a Systems Perspective

DNV GL © 2013

� Larger sizes can allow for longer deferral periods, but can also add cost without

much value if duration or capacity is in excess of system load management needs.

� Losses can decrease or increase, depending on the storage size and system set-up,

but the cost and benefits of losses tend not to have significant effect on overall

cost-effectiveness.

Deferral is the primary value benefit for the substation sited energy storage when other applications (e.g., ancillary services or renewable integration) are not considered.

The ability to move storage across multiple sites can increase deferral value for an incremental cost lower than the price of a new unit.

� Higher deferral costs, lower battery costs, and the ability to move across multiple

sites in sequence can result in positive net values for this application.

Example of Cost-effectiveness Evaluation Conclusions:Distribution Use Cases, Deferral Case

DNV GL © 2013

� Energy storage has potential to improve power quality, shift solar PV production,

and mitigate line and equipment overloads

Energy storage can facilitate PV integration while enabling additional potential system operational benefits, but within a limited range of cost-effectiveness

Due to it’s modularity and performance capabilities, energy storage can enable PV deployment in areas previously deemed infeasible/constrained

� Storage can feasibly connect large, remote PV production sites that might be

difficult to connect through conventional feeder configurations

� Storage provides additional capacity and ensures consistent production from PV

Cost-effectiveness Evaluation Conclusions:Distribution Use Cases, PV Case

DNV GL © 2013

User Interface

Input profile assumptions

Distribution Circuit Model(s)Circuit assumptions

Model Data Processing

Storage project assumptions

Charts / Conclusion

InputsLoad profilesEV / No EVPV / No PV (customer vs. util)Storage / No StorageStorage Control PriorityReliability EventEtc.

Engineering OutputskW Delta (time)Energy ∫kWVoltage Levels (time)Harmonics‘Equipment’ Usage (#)Storage Usage (# cycles)Etc.

Financial OutputsStorage CostsStorage Benefits

Avoided CostsEarnings

Alternative BenefitsAsset loss of life Deferral valuesEtc.

TranslationCapacityEnergy ShiftedEnergy SavingsPower Quality ∆Reliability ∆Asset lifetimeStorage lifetimeEtc.

Storage Controls

Select

Multiple Scenarios

Run Analyze

How DNV GL Approached Evaluation: ES-GRID Modeling Flow

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DNV GL © 2013

Assessing Storage Locations and Benefits

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Meeting Circuit Needs

� Storage solution tailored to circuit

� Evaluates multiple options � Allows for identification of best

value options

SitePeak

Demand (kW)

Peak Demand (kVA)

1 4,555 5,079

2 3,716 3,716

3 2,876 3,031

4 1,853 1,868

5 992 1,231

6 453 576

Example shows different storage sizes as a possible solution

DNV GL © 2013

1.5MW

Substation

Energy Storage

1.5MW

Substation

Energy Storage

Distributed Storage: Multiple versus a Single Unit

Site

Peak Demand (kW)

Peak Demand (kVA)

# ofDevices

Capacity (kW)

1 312 386 13 325

2 198 244 8 200

3 266 320 11 275

4 323 399 13 325

5 383 474 15 375

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Substation versus edge of Grid� Difference in performance� Difference in benefits � Difference in costs

DNV GL © 2013

Business Case Example – Distribution Deferral

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Core Cases

� Battery Types: Li-ion, Advanced Lead-acid

� Size: 0.5 MW, 1 MW, 2 MW

� Duration: 2 hour, 4 hour

� Total Number of “Cases”: 270

Storage discharging

Storage charging

Base load

Storage shaving

peak

Sample DaySubstation-sited energy storage

enables:

1) Distribution peak capacity

support (Deferral)� Output power from storage

reduces flow through substation transformer

� Peak reduction facilitates deferral of substation upgrades

2) Distribution operation (voltage/var support)� reduced substation voltage

drop, improved power quality

3) Loss reduction� reduced substation power

losses

1000

2000

3000

4000kW

DNV GL © 2013

ES-GRID Engineering Analysis Results Summary Example

Properly sized energy storage installed at the substation can:

� reduce peak demand, reduce system losses, mitigate voltage exceptions

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p.u.: per-unit, maximum/minimum nodal voltage across the network

Losses: refers to distribution network energy losses in lines, transformers, etc.

Tap changes: refers to the total number of changes in the load tap changer setting. Monitoring equipment operations provides an indication of equipment wear and tear, though the value is not directly included in the financial calculation.

Over/under voltage events: total number of over and under-voltages in the next for all hours of the year

500 kW, 500 kW, 1000kW, 2000kW,

2 HR 4 HR 4HR 2HR

Peak demand (kVA) 4,523 4,323 4,195 4,247 3,957 3,957

Maximum real power demand 4,049 3,901 3,744 3,795 3,538 3,549

Maximum reactive power 2,017 1,960 1,914 1,918 1,822 1,822

Total energy demand (MWh) 18,906 18,958 18,960 19,011 19,067 19,155

Total Losses (MWh) 406 405 405 406 407 408

Tap changes (#) 6,541 7,077 7,079 7,113 7,033 6,451

Maximum voltage (p.u.) 1.0520 1.0461 1.0462 1.0462 1.0463 1.0463

Overvoltage events (#) 10 0 0 0 0 0

Minimum voltage (p.u.) 0.9728 0.9688 0.9691 0.9692 0.9685 0.9685

Undervoltage events (#) 0 0 0 0 0 0

MetricBase case 1000kW,

2HR

DNV GL © 2013

ES-GRID Financial Results Summary Example

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� Deferral is the primary value benefit for the substation sited energy storage.

� The rate of load growth affects cost-effectiveness of an investment.

� The use of mobile energy storage can further increase the cost-effectiveness of

energy storage for deferral

� Mobile energy storage enables cases with lower alternative deferral costs to be

cost-effective.

� Six illustrative runs are shown below:

Scenario # Size Deferral Value Sites Load Growth Benefits Costs NPV BCR

178 0.5 MW 4 hr $538/kW Single 1% 2,617 -2,362 255 1.11

205 1 MW 4 hr $538/kW Single 1% 3,627 -4,735 -1,108 0.77

175 0.5 MW 4 hr $309/kW Single 1% 1,503 -2,362 -859 0.64

175 0.5 MW 4 hr $309/kW Multiple 1% 2,854 -2,703 150 1.06

179 0.5 MW 4 hr $538/kW Single 2% 1,498 -2,362 -864 0.63

DNV GL © 2013

Topics for Today’s Discussion

� California Efforts in Energy Storage

– Ruling that was implemented

– Cost Effectiveness Process to support ruling

– Potential Implications of the ruling

� New York Best Battery & Energy Storage Lab

– Roles of Public Private Partnerships

– NY-BEST Commercialization & Test Center for Storage

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DNV GL © 2013

Utilizing Public-Private Partnerships

� New York State examined the potential for electricity storage and determined

that it wanted the State to be a leader in Storage

� Looked to leverage leading companies (GE, BAE Systems, Corning) in New

York

� Looked to leverage strong academic / research universities in the State

� Goals were to not only advanced the technology, but also attempt to draw

industry leading manufacturers and suppliers to the State

� Transform manufacturing to high tech job potential

� Potential to revitalize “Northern Cities” - Rochester, Syracuse, Buffalo – with

high test industries

� Seeded $25 million to a program and asked NYSERDA to look at innovative ways

to participate and promote Storage

DNV GL © 2013

Public-Private Partnerships

� NYSERDA took new approach to Energy Storage – departed from typical path of

having a program dedicated to a technology area

� NY-BEST was created as an attempt to leverage public-private partnerships and

accelerate the electricity storage industry

� Group is made up of a cross section of Industry, Academic, and “At Large”

members from additional areas such as utilities, consulting, testing agencies,

etc.

� Organization was originally seeded with funds to distribute as grants for storage

projects

� Goal of organization was to become self-sustainable as well

� Lab was created as a venture to secure viability of the lab

� Board and organization created concept of a testing center in New York

DNV GL © 2013

BEST Test Center & Commercialization Center

� Full scale testing capabilities – from cells and modules to packs, racks and MW-

scale systems

� Strength of DNV KEMA expertise and knowledge

� Shared, industry-wide resource intended to grow the energy storage industry in

New York State

� Environmental testing – full suite of chambers and rooms to accompany each

scale of testing

� Cost effective life and accelerated aging testing

� Northeast US location with excellent user access

DNV GL © 2013

BEST Test and Commercialization Center

A Joint Project of NY-BEST and DNV KEMA

DNV GL © 2013

� Performance, durability/life, abuse/safety

� Test to existing/emerging standards

� IEC 61427-2

� UL 1973

� UN 38.3

� IEEE P2030.3

� IEC 62133

� DOE/PNNL Protocols

� Others as applicable/available

Capabilities: Types of Testing

DNV GL © 2013

� Single Cell – Low/High Power : 5V to 50A range - Testing and evaluating cells: high

volume testing such as repetitive cycling and validation

� CELL/Module/Packs Level – 20V to 600A - Battery Life Test: ideal for testing and

evaluating battery modules and large packs (e.g. HEV/EV applications) from 0 to 80

Volts, also cell level over voltage, over charge and discharge conditions

� Module/Battery Level - 100V/50A to 600A - Battery Life Test: ideal for testing and

evaluating HEV as well as industrial battery modules and packs.

� System/Battery Pack Level (1000V/500A (240kW) - testing and evaluating system

level high voltage battery packs found in automotive, Grid, and other energy

storage applications at the system level.

� System Level Testing to 2 MW in Chalfont PA or in field.

Capabilities: Types of Testing

DNV GL © 2013

Capabilities: Testing

• Test Equipment– Single Cell Testers – PEC SBT 550 5V/50amp– PEC SBT 2050 20v/50A 24CH/machine– PEC SBT10050 100V/50A - 12 CH/machine– PEC SBT1000-500-2

• 1000V/500A CH - 2CH/machine

– 1000kW Test Stand - 1- 1000kw channel

• Environmental Chambers– Single cell - CSZ ZP(H)-16– Module - CSZ ZP-64-15-SCT/WC– Rack - CSZ WM-1100-MP4-ST2/WC

• Over 300 Channels total with Environmental Support

DNV GL © 2013

Capabilities: Test Programs

• Cell Characterization• Capacity, efficiency, SOC/DOD,

life, safety

• Cell Application Performance• Utility level Applications

• Stack level Testing• Battery Module Performance• Storage System Basic Operation

& Safety• Safety and Failure modes,

responsiveness

• Storage System Interconnection Compliance

• Harmonics, Surges, power factor, loss of grid/islanded (1547)

• Storage System Performance• Storage System Extended

Application Cycling (Temp/Hum/abuse)

• Field Commissioning and Extended Testing

DNV GL © 2013

Capabilities: Diagnostics and Analytical

Spectroscopy and Microscopy•Vibrational Spectroscopy •Electronic Spectroscopy•Luminescence Spectroscopy •Elemental analysis •X-ray diffraction•X-ray crystallography•Optical Microscopy•SEM, TEM, FIB-SEM•Ultra-microtomy

Material Separation and Structure Characterization•HP Liquid Chromatography•Ion Chromatography•Gas Chromatography•Mass Spectrometry•GCMS•LCMS•NMR and EPR•Competitive Analysis

Polymer and Physical Characterization•Rheology•Size Exclusion Chromatography•Functional Analysis Chromatography•Particle and Void Size Analysis •Profilometry•Tensiometry and surface physical properties•Atomic Force Microscopy•XPS/ESCA/SIMS (static and dynamic)

The Center also provides access to a wide array of other unique capabilities in the NY-BEST network

DNV GL © 2013

Next Steps on Facility

� The Testing lab is scheduled to be open in April 2014

� Initially focusing on verification and lifecycle testing

� Located in Rochester, NY at the site of Kodak’s business park

� Business park, area are being revitalized by the State

� Many new firms are being introduced into the facility

� The organization is also becoming a leading voice in the storage industry

� Advancing stakeholder issues such as Safety Standards for Storage

� Assisting with Policy issues nationally and regionally for the State.

DNV GL © 2013

SAFER, SMARTER, GREENER

www.dnvgl.com

IEEE Power & Energy Society Technical Meeting

31

Richard Fioravanti, Head of Department, Distributed Energy ResourcesRichard.Fioravanti@dnvgl.com

(703) 631-8488